This is addressed to potential real estate investors, the professionals already know about this.

Just like any other field, you need to acquire requisite skills and knowledge by interacting with successful investors, reading books to get yourself prepared for the challenges, as nothing comes easy. It is always better to learn from information than from your experience.

Having said this it is far cheaper to build than to buy a completed house, but you can only achieve this if you are directly involved in the building process or you have a trustworthy proxy to represent you. Getting involved entails directly procuring materials yourself and being on site to ensure that those materials are actually used. You have to be familiar with the pricing, the various qualities and the actual quantity of materials you need. What you will actual pay for will be labour at various stages under your supervision (or by trusted proxy).

By so doing you would have a saved minimum of 50% of the price tag of developed ready made property and yours or the one you develop will be of better quality. This will minimise your over exposure to mortgage loan.

This butresses the fact that you make more money by developing your bare plot to sale at a later time rather than selling your land that has already appreciated in value.
In real life we are all aware that Mama Ngina that sells cooked corn or rice make far more money than selling raw corn from the farm or rice. By developing your plot you are actually producing something, that is turning a raw material (land) to finished product (house).

I am currently building and agree with above sentiments...the guys will rob you blind if you are not directly involved.

BTW, it is Wanjiku not Mama Ngina...

hi all,
all the above sentiments are true.
myself going 4 building my own house with all the taste i desire of.

Refer to a long thread that ran sometimes back - "To build or buy". While I agree that building can be cheaper than buying, it can also turn to be a very costly mistake.

+Wrong neighbourhood - you can find yourself next to vacant plots 5 years down the line, or incomplete structures that are an eye-sore and a security loophole.

+Amenities - nice house, but no road there. No communal access gate, shared watchman etc - you need to pay your own. To do the road, you are looking at let's say 1km to the main road. When buying you get other facilities communally.

+Time to build - spending 3 years with your money tied in an incomplete structure while you are paying rent elsewhere.

+Getting carried away? - Sometimes you may over-invest in some areas - roofing, fittings, landscaping etc. While this is good for you as long as you live there, selling the house in future (if you have to move) becomes very difficult, as you feel no-one is giving you the value of money you invested. Same case for renting. Remember: If the average rent for a 3-bedroom house in Ruai is 15K, you can never get double however much you have souped it up - the location has its price ceiling

Unless you urgently need to move into a house, I've not seen a good case for buying over building.

The type of financing may influence whether you are going to build or buy. Until recently, most mortgage companies would only provide funds for finished houses.

Disadvantages and Advantages of Building:
You build a hse to your specific requirements. If you have three daughters and no son or a sick mother you take that into account. The hse therefore becomes difficult to rent out as you grow older and your situation changes.When you buy the houses are designed to appeal to the general public and it is easy to rent out when your circumstances change.
Infrastructure/anemities are there when you buy: sewage, electricity, water, tarmarc roads, street lights etc are there. When you build the cost of bringing electricity, water,street lights, sewage,tarmarcing roads etc can be prohibitve; you have to think of septic tank, bore hole and all that nonsense.
The cost of mortgage is high yes, but you start getting rent or staying in immediately, not the five or so years it takes you to complete the hse, meanwhile you are paying loans for which there is no return, cost of building is going up from initial estimates.
A partially completed hse is very difficult to sell as it may not meet my specific requirements eg two wives, staying with my inlaws etc.
Yes building appears cheaper, but when I buy, I go in switch the lights and they are on, turn on the water and it is on, in the meantime Nrb Water Co is telling you the meters are out of stock etc.
You may build a palace, but if your neighbour has built a shantie near you the value of your hse goes down.
Security can be a major issue when you are building in an isolated ares, when you buy it is probably a fenced development.
Nursey school, shops, AND A BAR are always there in developed estates
THE TOWNS AND RURAL AREAS ARE FULL OF HALF COMPLETED HOUSES. YES, THEY MAY HAVE APPEARED CHEAPER TO START, BUT WHAT WENT WRONG?